I hereby report to the Congress on the developments since my last
report of January 10, 1997, concerning the national emergency with
respect to Libya that was declared in Executive Order 12543 of
January 7, 1986. This report is submitted pursuant to section 401(c)
of the National Emergencies Act, 50 U.S.C. 1641(c); section 204(c) of
the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C.
1703(c); and section 505(c) of the International Security and
Development Cooperation Act of 1985, 22 U.S.C. 2349aa-9(c).

As previously reported, on January 2, 1997, I renewed for another
year the national emergency with respect to Libya pursuant to the IEEPA.
This renewal extended the current comprehensive financial and trade
embargo against Libya in effect since 1986. Under these sanctions,
virtually all trade with Libya is prohibited, and all assets owned or
controlled by the Libyan government in the United States or in the
possession or control of U.S. persons are blocked.

There have been no amendments to the Libyan Sanctions Regulations,
31 C.F.R. Part 550 (the "Regulations"), administered by the Office of
Foreign Assets Control (OFAC) of the Department of the Treasury, since
my last report on January 10, 1997.

During the last 6-month period, OFAC reviewed numerous applications
for licenses to authorize transactions under the Regulations.
Consistent with OFAC's ongoing scrutiny of banking transactions, the
largest category of license approvals (68) concerned requests by
non-Libyan persons or entities to unblock transfers interdicted
because of what appeared to be Government of Libya interests.
Two licenses authorized the provision of legal services to the
Government of Libya in connection with actions in U.S. courts in which
the Government of Libya was named as defendant. Licenses were also
issued authorizing diplomatic and U.S. government transactions and to
permit U.S. companies to engage in transactions with respect to
intellectual property protection in Libya. A total of 75 licenses
were issued during the reporting period.

During the current 6-month period, OFAC continued to emphasize to
the international banking community in the United States the
importance of identifying and blocking payments made by or on behalf
of Libya. The office worked closely with the banks to assure the
effectiveness in interdiction software systems used to identify such
payments. During the reporting period, more than 100 transactions
potentially involving Libya were interdicted.

Since my last report, OFAC collected 13 civil monetary penalties
totaling nearly $90,000 for violations of the U.S. sanctions against
Libya. Ten of the violations involved the failure of banks to block
funds transferred to Libyan-controlled financial institutions or
commercial entities in Libya. Three U.S. corporations paid the OFAC
penalties for export violations as part of the global plea agreements
with the Department of Justice. Sixty-seven other cases are in
active penalty processing.

Various enforcement actions carried over from previous reporting
periods have continued to be aggressively pursued. Numerous
investigations are ongoing and new reports of violations are
being scrutinized.

The expenses incurred by the Federal Government in the 6-month
period from January 7 through July 6, 1997, that are directly
attributable to the exercise of the powers and authorities conferred
by the declaration of the Libyan national emergency are estimated at
approximately $660,000.00. Personnel costs were largely centered in
the Department of the Treasury (particularly in the Office of Foreign
Assets Control, the Office of the General Counsel, and the U.S.
Customs Service), the Department of State, and the Department
of Commerce.

The policies and the actions of the Government of Libya continue
to pose an unusual and extraordinary threat to the national security
and foreign policy of the United States. In adopting United Nations
Security Council Resolution 883 in November 1993, the Security Council
determined that the continued failure of the Government of Libya to
demonstrate by concrete actions its renunciation of terrorism, and in
particular its continued failure to respond fully and effectively to
the requests and decisions of the Security Council in Resolutions 731
and 748, concerning the bombing of the Pan Am 103 and UTA 772 flights,
constituted a threat to international peace and security. The United
States will continue to coordinate its comprehensive sanctions
enforcement efforts with those of other U.N. member states. We remain
determined to ensure that the perpetrators of the terrorist acts
against Pan Am 103 and UTA 772 are brought to justice. The families
of the victims in the murderous Lockerbie bombing and other acts of
Libyan terrorism deserve nothing less. I shall continue to exercise
the powers at my disposal to apply economic sanctions against Libya
fully and effectively, so long as those measures are appropriate, and
will continue to report periodically to the Congress on significant
developments as required by law.